WTC share price in focus
Founded in 1994 by Richard White and Maree Isaacs, WiseTech Global develops cloud-based software solutions for the international and domestic logistics industries.
WiseTech offers a comprehensive suite of products that support various logistics functions, including forwarding and customs, landside transport, rates and contracts, warehousing, and transport management systems.
Its flagship software, CargoWise, is a market-leading platform widely adopted by the logistics industry. It is used by all 25 of the largest global freight forwarders and 46 of the top 50 third-party logistics providers, cementing its reputation as an industry leader.
The key metrics
For investors, WTC’s revenue, gross margin, and profit can provide valuable insights into the company’s performance.
WTC last reported an annual revenue of $1,042m with a compound annual growth rate (CAGR) over the last 3 years of 27.1% per year. While the absolute number is useful to know, the key point is the trend. We want to see a consistent, upward trajectory in revenue.
Gross margin measures profitability before taking into account overhead costs – it reflects the strength of the company’s core business operations. WTC’s latest reported gross margin stood at 84.0%.
Finally, the number we’re most interested in – profit. Last financial year WiseTech Global Ltd reported a profit of $263m. Three years ago they made a profit of $108m, representing a CAGR of 34.5%.
Financial health of WTC shares
Profitability is important, but equally important is the capital health of the company. We want to know about the company’s leverage, their capacity to pay debts, and their ability to generate a return on assets. One measure we can look at is net debt. This is simply the total debt minus the company’s cash holdings.
WiseTech Global Ltd’s net debt currently sits at -$19m. A negative value here indicates that the company has more assets than debt, suggesting WTC is in a stong financial position.
Another figure we can look at is the debt/equity percentage. This tells us how much debt the company has relative to shareholder equity – this is also known as leverage. WTC has more equity than debt, with a debt/equity ratio of 4.7%.
Finally, we can look at the return on equity (ROE). The ROE tells us how efficiently the company is turning shareholder equity into profit – high numbers indicate the company is generating a lot of value for investors, while a low number raises concerns that capital isn’t necessarily being allocated efficiently. WTC generated an ROE of 12.8% in FY24.
What to make of WTC shares?
With strong revenue growth over the last 3 years, profits trending upwards, and a solid ROE, the WTC share price could be one worth watching in 2025.
Please keep in mind this should only be the beginning of your research. It’s important to get a good grasp of the company’s financials and compare it to its peers. It’s also important to make sure the company is priced fairly. To learn more about share price valuation, you can sign up for one of our many free online investing courses.
